WORLD TRADE  
ORGANIZATION  TN/RL/W/176 
31 March 2005 
 (05-1311) 
Negotiating Group on Rules Original:   English 
  
 
CONTRIBUTION TO THE DISCUSSION ON THE FRAMEWORK 
FOR DISCIPLINES ON FISHERIES SUBSIDIES 
 
Paper from Brazil
 
 
  The following communication, dated 31 March 2005, is being circulated at the request of the Delegation of Brazil. 
 
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I. INTRODUCTION 
1. At the Fourth Ministerial Conference in Doha, Ministers agreed to "negotiations aimed at 
clarifying and improving disciplines under the Agreem ents on Implementation of Article VI of the 
GATT 1994 and on Subsidies and Countervailing M easures, while preserving the basic concepts, 
principles and effectiveness of these Agreements and their instruments and objectives, and taking into 
account the needs of developing and least-develop ed participants.  In the initial phase of the 
negotiations, participants will indicate the prov isions, including disciplines on trade distorting 
practices that they seek to clarify and improve in  the subsequent phase.  In the context of these 
negotiations, participants shall also aim to clarify and improve WTO disciplines on fisheries 
subsidies, taking into account the importance of this sector to developing countries". 
 2. Notwithstanding the fact that the issue of deve lopment has been particularly emphasized in 
the IV Ministerial Conference, it has been a long-standing and key trait of the multilateral trading 
system, of which Part IV of the GATT 1947 and th e special and differential provisions resulting from 
the successive Rounds are the most visible examples.  The Doha mandate on Rules is a recent expression of that long-standing concern with the speci al needs of developing countries.  Article 27 of 
the Agreement on Subsidies and Countervailing Measures (ASCM) is also an expression – and a 
significant one ─ of that trait, in so far as it explic itly recognizes that "subsidies may play an 
important role in economic development pr ogrammes of developing country Members". 
 3. The issues of development and S&D are clearly formulated in Article XXXVI of the 
GATT 1994:  "international trade" is "a means of  achieving economic and social advancement".  
Consistently, the same Article establishes that "the raising of standards of living and the progressive 
development of all contracting parties" are incl uded in the "basic objectives" of the GATT and that 
attaining those two goals is "particularly  urgent" for developing countries.  TN/RL/W/176 
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 4. This notion of urgency underscores a fairly simple but fundamental aspect:  the realities in 
developed and developing countries are not the same.  The latter group of nations has specific needs 
that must be taken into account with a sense of priori ty.  The system is, thus, supposed to contribute to 
the reduction of asymmetries between developed a nd developing countries, which should be fully 
reflected in the balance of rights and obligations of  Members.  That contribution should, moreover, be 
very concrete:  Article XXXVI of the GATT explic itly establishes that developing countries may be 
allowed to " use special  measures  to promote their trade and development" (emphasis added). 
 5. These "basic concepts", "principles" and " objectives" of the GATT and the World Trade 
Organization (WTO) must be firmly upheld if the mu ltilateral trading system is to grow ever more 
responsive to the needs of developing countries, especially in a round of negotiations that Ministers 
decided to name the "Doha Development Agenda".  Ministers stressed, in that regard, that the 
"majority of the WTO Members are developing coun tries" and pledged to "seek to place their needs 
and interests at the heart of the Work Programme adopted in this Declaration".   
6. It follows, therefore, that the developmental aspect of the system should be given practical 
application.  At close examination, however, the ma nner in which those concepts were translated into 
actual provisions in the various Agreements show that unfortunately they were not capable of 
avoiding the introduction of obligations that, when  applied indiscriminatel y to both developed and 
developing countries, seriously limit the ability of th e latter to implement public policies designed to 
overcome underdevelopment and its so cial and economic consequences.  This is so because, in many 
instances, those obligations are premised on econom ic conditions (e.g. inte nsive capital accumulation, 
few market failures, high export capacity), that  are simply not those prevailing in developing 
countries.  In other words, important economic asy mmetries were insufficiently taken into account.  
Negotiations launched at Doha must not miss the opportunity to correct this situation. 
 II. FISHERIES SECTOR 
7. The comments made above are especially releva nt in the discussion on fisheries subsidies.  
Deprived of the necessary means ─ especially vessels, storage capacity and processing units ─ to 
exploit in a viable, productive and sustainable fa shion their fishing resources, many developing 
countries, some of which are endowed with ex tensive exclusive economic zones (EEZs), cannot 
consolidate their capacity to exploit their fisheries re sources, to the benefit of their citizens.  In some 
instances, the situation is even wo rse:  in the eventual absence of effective control on the part of 
developing countries, numerous vessels of different countries fish or even overfish in waters under the 
jurisdiction of Governments other than their own.  8. Brazil believes that the solution to this problem may require public policies designed to 
enhance the ability and capacity of fishermen in deve loping countries to exploit at a sustainable level 
the fishing resources available in the jurisdiction of  their Governments, as well as in their high seas 
(fishing managerial schemes established under releva nt international organizations, such as the 
International Commission for the Conservation of Atlantic Tunas (ICCAT)).  TN/RL/W/176 
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 9. This is a view that is already well establishe d in several international instruments related to 
fisheries, all of which recognize and protect the right of developing countries to access and develop 
their fisheries.  Among those instruments, a speci al mention must be made to the United Nations 
Convention on the Law of the Sea (UNCLOS)1, the Agreement for the Implementation of the 
Provisions of the United Nations Convention of the Sea2, the Code of Conduct for Responsible 
Fisheries3 and the International Plan of Action for the Management of Fishing Capacity4. 
                                                      
 1 Art. 116 - Right to fish on the high seas  
All States have the right for their nationals to engage in fishing on the high seas subject to :   
b) the rights and duties as well as the interests of coastal States  provided for, inter alia , in 
article 63, paragraph 2, and articles 64 to 67;  and 
 2 Art. 5- General Principles 
In order to conserve and manage straddling fish stocks and highly migratory fish stocks, coastal States 
and States fishing on the high seas shall, in giving ef fect to their duty to cooper ate in accordance with the 
Convention: 
b) ensure that such measures are based on th e best scientific evidence available and are 
designed to maintain or restore stocks at levels capable of producing maximum sustainable 
yield, as qualified by relevant environmental and economic factors, including the special 
requirements of developing States,  and taking into account fishing patterns, the 
interdependence of stocks and any generally recommended international minimum standards, 
whether sub-regional, regional or global;  
 
Art. 24- Recognition of the special requirements of developing States 
1. States shall give full recognition to the special  requirements of developing States in relation 
to conservation and management of straddling fish stocks and highly migratory fish stocks and development of fisheries for such stocks.   To this end, States shall, either directly or 
through the United Nations Development Programme, the Food and Agriculture Organization 
of the United Nations and other specialized agencies, the Global Environment Facility, the Commission on Sustainable Development and other appropriate international and regional 
organizations and bodies, provide assistance to developing States. 
 
Art. 25- Forms of cooperation with developing States 
1. States shall cooperate, either directly or through sub-regional, regional or global 
organizations:  
(a)  to enhance the ab ility of developing States, in partic ular the least developed among them 
and small island developing Stat es, to conserve and m anage straddling fish stocks and highly 
migratory fish stocks and to develop th eir own fisheries for such stocks; 
(b)  to assist developing States, in particular the least developed among them and small island 
developing States, to enable them to participat e in high seas fisheries for such stocks, 
including facilitating access to such fishe ries subject to articles 5 and 11.  
3 Art. 5- Special requirements of developing countries 
5.2. In order to achieve the objectives of this code and to support its effective implementation, countries, relevant international organizations, whether governmental or non-governmental, 
and financial institutions should give full recognition to the special circumstances and 
requirements of developing countries, including in particular the least developed among them, 
and small island developing countries.  States, relevant inter-governmental and non-
governmental organizations and financial institutions should work for the adoption of 
measures to address the needs of developing countries,  specially in the areas of financial and 
technical assistance, technology transf er, training and scientific cooperation and in enhancing 
their ability to develop their ow n fisheries as well as to partic ipate in high seas fisheries, 
including access to such fisheries.  
 4 Art. 10 - The application of this International Plan of Action should be based on the Code of Conduct, 
particularly on Article 5, in relation to enhance the ability of developing States to develop their own fisheries as 
well as to participate in high seas fisheries, including access to such fisheries , according to their legitimate 
rights and obligations under the international law.  
 TN/RL/W/176 
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 10. There is no doubt, however, that official s upport and environmental c onsiderations go hand in 
hand:  stocks are exhaustible, and subsidies – regardless of whom they benefit – must not threaten the 
sustainability of resources that are valuable to i ndividual countries and the international community as 
a whole.  In other words, official support should not undermine existing management and 
conservation measures adopted at the appropriate organisations.  Nor should any flexibility provided 
to developing countries contribute to distortions in the international fishing market or aggravate the 
depletion of stocks. 
 
11. In light of the above, Brazil believes that di sciplines on fisheries subsidies should take into 
consideration the economic realities of developing count ries, especially those that are late-entrants to 
fishing activities;  provide them with the flexibility to overcome serious constraints in their ability to 
responsibly explore their fishing resources;  devel op their fisheries both within their jurisdictional 
waters (EEZ and territorial sea) as well as in the high seas.  12. It should not be overlooked that the overe xploitation of some fisheries resources was the 
result of an active fishing policy conducted by devel oped countries with a long fishing tradition, using 
highly industrialized and mobile flee ts, most often heavily subsidized.  The situation is completely 
different in developing countries, as mentioned be fore.  There, the problem is not overcapacity 
leading to overexploitation, but just the opposite :  lack of capacity thwarting development. 
 13. Developed countries should assume a higher le vel of responsibility and, consequently, bear 
the greatest part of the burden resulting from a br oader prohibition on fisheries subsidies aimed at 
restoring stocks or keeping them at a sustainable level of exploitation.  On the other hand, nations which have not contributed to the depletion of stoc ks or which fish below sustainable levels should 
not be penalized by a prohibition which, if applie d equally to countries in completely different 
situations, could block developing countries from le gitimately developing their fisheries sector. 
 
14. Moreover, applying the sugg ested prohibition to developing nations would also undermine 
the distributive role of internati onal trade, since such measure would have the effect of freezing the 
status quo between the haves and have not in fisher ies, while maintaining th e hegemony of several 
traditional fishing nations who ─ one should repeat ─ have built their fishing fleets with generous 
subsidies.  
 
15. Therefore, Brazil advocates that special a nd differential treatment be accorded to those 
developing countries which have not yet developed their fishing industry in a way compatible with 
their needs and potentialities, and without losing sight of the shared responsibility of all players in that 
industry for the conservation of the fishing resources, regardless of scale. 
 
16. Brazil is encouraged by the progress reached so far by the negotiations and is confident that 
the views and proposals contained in this submission will lead to future fisheries subsidies disciplines 
that create environmentally-sound and more equitable opportunities of progress for all countries, especially for the developing ones which have not ye t fully reaped the benefits of their fishing 
resources. 
 
III. CONCERNS REGARDING THE FISHERIES SECTOR 
17. Some of the concerns expressed so far by  Members in this Negotiating Group on Rules are 
the following:   
(i) The world’ stocks of fisheries is rapidly depleting in the recent years.
  According to FAO5, 
75 per cent of the major marine fish stocks or species groups for which information is 
                                                      
5 State of World Fisheries and Aquaculture 2002, Rome, Part I, p.23.  TN/RL/W/176 
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 available are overexploited, fully exploited, significantly depleted or recovering from 
overexploitation.  Such alarming situation seems to  be the result of the interaction of different 
factors, including overcapacity (estimated at 250 per cent6), overfishing and inadequate 
management (including "illegal, unre ported or unregulated" (IUU) fishing); 
(ii) Fisheries subsidies vs. overcapacity and overfishing.   Fishing subsidies contribute to 
overcapacity under real-world conditions7, since they reduce operating costs of fishing 
enterprises and, therefore, affect the performance of the industry.  It should also be taken into account that, in the fishing sector, subsidies distort not only trade, but production.  Lack of transparency and accountability is another characteristic of fishing subsidies; 
(iii) Fisheries management has already been the subject of international attention.
  Aiming at the 
conservation and sustainable use of fisheries resources around the world, many nations have 
agreed to establish certain national, regional and international rul es, such as those of 
UNCLOS, the 1995 United Nations Code of Conduc t for Responsible Fisheries, the Food and 
Agriculture Organization (FAO) International Pl an of Action for the Management of Fishing 
Capacity (IPOA – Capacity), and the Internati onal Plan of Action to Prevent, Deter and 
Eliminate Illegal, Unreported and Unregulated  Fishing (IPOA - IUU).  Improved disciplines 
on fisheries subsidies are not expected to replace the need for improved fisheries management.  Improved fisheries management, however, should be dealt within appropriate 
international fora, and should be recognized by WTO disciplines only to the extent required 
to administer the fisheries subsidies in accordance with the rules to be agreed upon. 
PROPOSAL 
 
18. Fisheries subsidies are already subject to th e disciplines of the ASCM and Article XVI of the 
GATT.  As dictated by the Doha mandate, what n eeds to be developed and agreed by Members are 
the specific improved disciplines governing this sector.   
19. In this sense, the ASCM alr eady provides that:  (i) prohibited subsidies are those subsidies 
contingent, in law or in fact, whether solely or  as one of several conditions, upon export performance 
or upon the use of domestic over imported goods
8;  and (ii) actionable subsidies are those subsidies 
which cause adverse effects to the interests of othe r Members (injury to the domestic industry, serious 
prejudice to the interest of another Member or nu llification or impairment of benefits accruing 
directly or indirectly to other Members under GATT 1994).9  These subsidies usually cause price 
suppression, price undercutting, market displacement and increased shares of national and 
international markets.  20. In our view, fisheries subsidies have even further distortive effects.  In addition to the 
commonly assigned effects of subsidies outlined in the previous paragraphs, fisheries subsidies have a 
damaging distortion in the access to fisheries resources which are not captured by the existing 
subsidies disciplines – that is, on the ability of comp etitors to produce and not merely to sell.  The 
primary economic distortion takes place at the level of  production (stock depletion alters costs for all 
producers, market impacts as well as price effects ar e difficult to calculate considering the effects of 
fisheries subsidies on production), since subsidized  and non-subsidized fleets have to compete at 
equal footing for scarce/exhaustible resources.  
                                                     
 
6 Porter, 1998. Estimating Overcapacity in the Global Fishing Fleet. WWF. 
7 Some have argued that proper fisheries management can prevent subsidies from resulting in 
overcapacity.  The fact that there are no perfect management rules seems to be uncontroversial, which have lead 
us to the above conclusion. 
8 Article 3.1 of the ASCM. 
9 Article 5 of the ASCM. TN/RL/W/176 
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 21. Having said that, the Brazilian prop osal consists of the following: 
 (i) Definition of Fisheries Subsidies.
  Except for inland fisheries, all wild-capture10 fisheries 
subsidies programmes should be included in the definition of "fisheries subsidies".  The 
definition of fisheries subsidies must include a ll financial contributions or income or price 
support by a government ─ as defined in Article 1 of the ASCM ─ that are given to or on 
behalf of fishing interests.  Any such governmental payment given to or on behalf of fishing interests shall be considered "specific" with in the meaning of Article 2 of the ASCM.  
Moreover, subsidies granted for the purchase of foreign access rights (government-to-government payments for access by their domestic fleets to foreign EEZ fisheries) should also 
be covered by the definition of fisheries subsid ies.  Public service of fisheries management 
should not, in principle, be defined as fi sheries subsidy (stock assessments, regulatory 
enforcement, licensing, etc.)
11.  
(ii) Classification of Fisheries Subsidies.   Brazil favours the approach of classifying fisheries 
subsidies based both on their design and effects, according to the context in which they are 
provided: 
(a) "Green Box"  (non-actionable subsidies) – There should be an exhaustive list of non-
actionable fisheries subsidies, provided that they do not have trade-distorting or production-distorting effects through enhanc ing capacity and overfishing.  Subsidies 
that do not meet those conditions or do not  fall within the exhaustive list should be 
considered prohibited subsidies.  In this regard, Members may wish to discuss the 
following non-exhaustive list of examples of subsidies that could be considered non-
actionable: 
(1) subsidies that are aimed at improving conservation and the sustainable use of 
fisheries resources: 
 
(a) subsidies to research activities undertaken to improve fisheries 
management or environmental protection; 
(b) subsidies for compliance with safety or sanitary standards; 
(c) subsidies for the adoption of environmentally preferable gear or 
techniques. 
 
(2) subsidies to small scale fishing
12, provided that such fisheries are not 
"patently at risk"13;  
(3) subsidies for capacity reduction14; 
(4) subsidies aimed at fishermen retraining, to facilitate movement of labor out of 
the fishery sector and early retirement schemes. 
 
                                                      
10 Since the disciplines required to address subsidies to aquaculture would differ in important aspects 
from those proposed for wild-capture fisheries, they are not part of this proposal. 
11 Brazil is willing to discuss the scope of the concep t of "public service of fisheries management", as 
well as whether subsidies under that concept should be considered "green" subsidies. 
12 Subsidies granted to non-automa tic net-retriever fisheries activities developed in a small scale, 
usually encompassing artisanal fishing and family fishing.   Brazil deems it important that a clear-cut concept of 
"small scale fishing" be worked out. 
13 For example, a fishery could be considered "patently at risk" if it has been determined 
"overexploited", "depleted", or "recovering" by the FAO.  Brazil is willing to discuss and to further elaborate on 
this concept. 
14 Brazil is ready to engage in technical discussions which may be needed to ensure that those subsidies 
would not unduly benefit recipients.  TN/RL/W/176 
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 (b) "Red Box"  (prohibited subsidies) – All remaining subsidies that do not fall within the 
"green box" shall be considered as prohibited subsidies, together with those subsidies 
that are already prohibited under the current disciplines in Article 3 of the ASCM.  In 
other words, there would be a prohibition on  fisheries subsidies that, by reason both 
of their design and effects, cause, for exampl e:  1) the increase of fishing capacity or 
effort;  2) "illegal, unreported or unregulated " (IUU) fishing;  3) the increase of the 
domestic supply of fish, threatening the sust ainability of the fishing resource.  One 
exception could be envisaged: short-term  emergency relief and adjustment to 
fishermen suffering significant loss of income as a result of reductions in fishing caused by conservation measures or unforesee able natural disasters:  (a) in case of 
unforeseeable natural disasters and;  (b) to small scale fishermen suffering significant 
loss of income as a result of reductions in  fishing caused by conservation measures. 
22. There shall be a period of 3 (three) years for Members to phase out and eliminate their 
subsidies programmes that will fall within the prohibit ed subsidies category, from a level to be agreed.  
From the entry into force of these rules, Memb ers will not be permitted to create new prohibited 
subsidies. 
 23. Many Members have expressed their concer n on the very low number and quality of 
notifications on fisheries subsidies.  Members shoul d pursue an enhanced mechanism of transparency 
that enables the surveillance of the existing rules by all Members (better quality of the information 
provided in the notifications).  In this regard , Articles 8.3 and 8.4, as applied from 1995 to 1999, 
could be taken as the basis for a new provision on this matter
15. 
 
- Special and differential treatment for developing country Members 
24. The provisions of Article 27 of the ASCM should fully apply to fisheries subsidies.16  Since 
those provisions are not entirely appropriate to a ddress the specific needs of developing country and 
least developed country Members in the fishin g sector and taking into account social and 
environmental criteria, Brazil proposes that:  
(i) The following fisheries subsidies should be permitted to developing country 
Members, according to Articles 5, 6 (e xcept paragraph 1) and 7 of the ASCM
17: 
 
(1) Subsidies which increase fishing capacity  or effort.  Those subsidies cannot 
be responsible for IUU fishing, nor should they be allowed to enhance 
capacity beyond the sustainable level of exploitation within the limits of the fishing managerial schemes establis hed under relevant international 
organizations.  Specifically, those subsid ies must fall within one or more of 
the following exhaustive list: 
 
(a) subsidies to fishing vessel  construction or repair; 
(b) subsidies to vessel modernization or gear acquisition or improvement; 
(c) fuel subsidies; 
(d) bait or ice supplied for fishing activities. 
                                                     
 
15 For instance, a full and detailed notification could be  a pre-requisite for any subsidy that intends to 
be qualified as non-actionable subsidy. This should not be seen as a sufficient condition for that purpose. 
16 Some of the current provisions of Article 27 may have to be refined in the light of what is being 
suggested in this proposal. 
17 Brazil is open to discuss any possible amendment that may be needed in those articles, in order to 
cope with the specificities of the fishing sector. For in stance, the current definition of "adverse effects" may 
have to be clarified, in order to capture the impacts of a subsidy programme on production. TN/RL/W/176 
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(2) Payments received from other govern ments for access to the EEZ fisheries 
resources of the developing country; 
(3) Assistance to disadvantaged regions within the territory of a Member 
pursuant to a general framework of regional development in the sense of 
Article 8.2 (b) of the ASCM.  
 (ii) Serious prejudice in the sense of paragraph (c) of Article 5 of the ASCM shall be 
deemed to exist in the case of: 
 
(a) subsidies granted to fisheries that are "patently at risk"; 
(b) subsidies programmes related to th e construction, modernization or 
repair of vessels that result in a subsidized fleet tonnage in excess of 5 per cent of the limits and contingencies of fishing managerial schemes established under relevant  international organizations; 
(c) total ad valorem subsidization of a fleet exceeding 5 per cent of the 
value the production for countries that do not operate under the limits and contingencies of fishing mana gerial schemes established under 
relevant international organizations;  
(d) subsidies granted to a fleet or an enterprise to cover operating losses. 
 
(iii) the following special and differential tr eatment should be accorded to least-developed 
country Members: 
 
(1) "red box" subsidies that are prohibited under Article 3 of the ASCM and those 
listed in paragraph 21.(ii) (b) above should be consid ered actionable subsidies 
for a period of 10 (ten) years. 
 25. There shall be a period of 5 (five) years for developing country Members to phase out and 
eliminate their subsidies programmes that will fall within the prohibited subsidies category, from a 
level to be agreed.  
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